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Legally Speaking By OMAR J. ARCIA, ESQ. FORECLOSURE DEFENSE ATTORNEY


When is the Right Time for Homeowners to File for Bankruptcy Protection?


M


any homeowners are under the false impression that they should file for bankruptcy protection the moment they fall behind on their mortgage payments. However, every consumer must be aware that


bankruptcy should only be filed as a last resort, when absolutely necessary, and when all else fails.


Based upon our experience in handling hundreds of consumer collection matters, foreclosure and bankruptcy cases, there are really just a few instances when a client must file for bankruptcy protection. One such situation is after a final


foreclosure judgment has been entered and the homeowner is only


days away from a public auction of the home. Filing for bankruptcy protection at


this time will automatically cancel the foreclosure sale, and will provide


the homeowner with some valuable time to complete a loan modification application or private short sale of the home prior to a public auction. Filing for bankruptcy protection at the outset of a foreclosure proceeding is highly unadvisable, especially in view of the fact that in 2010 the average time to complete a foreclosure in Broward County was 600 days.


Several other instances when a bankruptcy filing is appropriate is when a


debtor is facing a garnishment of wages, seizure of his/her bank accounts, or when a creditor is attempting to repossess property or a vehicle after a final judgment. Under


these limited circumstances, filing for bankruptcy makes


absolute sense given that there is no time and possibly no legal grounds to attack the collection process in court. However, if a bankruptcy discharge is obtained too early, a consumer will not be able to file for bankruptcy protection again for another 8 years.


The preferred type of bankruptcy is a Chapter 7, assuming that your monthly expenses exceed your income. If you qualify for a Chapter 7, all credit card debt, unpaid medical expenses, and all other unsecured debt completely. Unfortunately, any debt owed to the federal government


is wiped out for


student loans or IRS debt will not be wiped out in a bankruptcy. You also may not qualify for a Chapter 7 bankruptcy if you have other assets which you could sell to cover your debts. In that case, you may have to file under Chapter 13,


to restructure your debt, and slowly pay all past due amounts


over a period of three to five years. The bankruptcy code is not easy to navigate.


If the bankruptcy petition is not


presented correctly not only will you not qualify for bankruptcy protection, but you may also be prevented from re-filing for 180 days or more. The Arcia Law Firm has assisted hundreds of


bankruptcy and foreclosure defense matters. If you are uncertain whether you qualify for bankruptcy protection or whether


it is the right time to file


bankruptcy, please contact the Arcia Law Firm today at 1-800-770-7102 or visit us online at www.arcialawfirm.com. Likewise, if you know anyone that is facing a mortgage related crisis, or is considering filing bankruptcy, please forward this article to them immediately.


local homeowners and consumers in


The Arcia Law Firm is privileged to successfully represent dozens of homeowners in our community. If you are struggling to make your monthly mor tgage payments, or if you just received a foreclosure summons, contact the Arcia Law Firm today at 1-800-770-7102, or visit www.arcialawfirm.com. We may be able to help you achieve a long term solution to your personal mortgage crisis.


www.CoralSpringsCityNews.com To Advertise in Coral Springs and Parkland City News, Please call 954-255-5226 March 2011 41


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